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What’s next in DNVB branding? Every vertical brand story has its beginning. For lifestyle and fashion DNVBs that are fortunate enough to work with the finest branding agencies, this story often begins with its founder’s biography, the problem that product x begins to solve, and proclamations of the brand’s inevitable staying power. It’s a short history, as most are in online-first retail. But it’s also a forward-thinking approach, one designed for: eCommerce, Instagram and Google advertising, and third party delivery. Less “we’ve been” and more “we will be.”

According to the godfather of the term, “DNVBs are maniacally focused on the customer experience and they interact, transact, and story-tell to consumers primarily on the web.” As brands begin to focus on off-line retail, you’ll begin to find that the packaging around the brands will change with that focus. Whereas technology and futurism appealed early on (2010-2014), the brands that succeed over the next ten years will focus on heritage as much as they focus on futurism.

Phase One (2010-2014): Technology

Warby Parker is the best example by a mile. The brand grew by implementing a practice that other direct-to-consumer companies had not. The company worked to eliminate all barriers to purchase by implementing tools designed to facilitate an ingenious customer experience. For this first phase of DNVB marketing, the eCommerce brand’s technology was the draw. The product is nominal and affordable but the access to it became just as much a part of the brand as the eyewear itself. Take this excerpt from a 2013 Wall Street Journal article co-written by Kevin Lavelle and me:

We are now in the age of e-commerce 3.0, where entrepreneurs can launch companies with few barriers to entry. eCommerce 1.0 consisted of crude online shopping in the ’90s offered by a few businesses met with significant consumer skepticism. This evolved into the more sophisticated interactions of e-commerce 2.0 in the mid 2000s, when most companies realized that if they weren’t online, they were endangering their future.

A new time is here — and the power no longer lies in the hands of a few buyers at large stores. Bigger businesses can be upended by an upstart competitor with a superior product. And retail startups no longer have to endure the long, slow road of trade-show hopping to get their product in front of a handful of buyers, or giving away a hefty portion of each sale to distributors.

Phase Two (2014-2018): Comedy

Dollar Shave Club’s 1m33s “Our Blades Are F***ing Great” video was developed to promote the launch of a (since-acquired) brand and has now been viewed over 25 million times. This internet ad is considered one of the premier examples of top funnel marketing and DSC’s brand of humor has since influenced other mens-focused brands to pursue humor as a means of brand differentiation: Chubbies (no. 67), Untuckit (no. 48), Tommy John (no. 54), and Mizzen+Main (no. 86).

Capturing one customer by way of a top funnel direct-to-consumer ad can cost upwards of $20 per click on Facebook. Digital advertising can be costly. To counter these steadily rising costs, brands have been stimulating awareness, interest, and consideration cycles by promoting a viral brand video. It achieves awareness, consideration, and intent.

Most importantly, introducing mainstream users to your brand and getting them to clickthrough for more information allows marketers to use tools like Facebook’s pixel to retarget casual visitors, moving them further down the sales funnel. Appealing to casual customers was an effective way of increasing top funnel traffic.

Phase Three (2018-forward): Heritage

Brands that began as the embodiment of online-first retailers are now expected to rival age-old incumbents, as they grow their annual revenues well beyond nine figures. Incumbent competitors are still around and some are even stronger than they were before the emergence of online rivals. All the while, new brands are beginning to compete on old-aged ground: mall retail, brick and mortar shops, and traditional advertising. The internet was supposed to completely eliminate these channels, instead, it provided cover until online retailers were prepared to go physical.

eCommerce has matured and physical retail has evolved into a more effective channel. As such, we’re beginning to see brands take on the traits of heritage companies. But if you’re eight years old, you won’t have much of a heritage story. For every Abercrombie, Filson, Ralph Lauren, Lily Pulitzer, Ray Ban, and Tag Heuer, there is a digitally vertical brand like Harry’s, Allbirds, and Outdoor Voices hoping to achieve staying power.

Heritage brands work to maintain heritage, while striving for futurism through of product and channel innovation (see Cole Haan). For heritage brands, presenting an aura of staying power means that the products and channels will present as forward-thinking for a millennial-driven, omni-channel age.

Meanwhile, vertical brands work to establish their products as an evolution of heritage products, while maintaining as many of their technological advantages as possible. For digitally vertical brands, longevity is projected by tethering to history and tradition.

The next wave in DNVB branding will be focused on developing history and tradition. Brands will deepen their roots by way of product collaborations, messaging, and unique origin stories of their own.

Look no further than this example of a heritage maker and vertical brand accomplishing both of their messaging objectives with one collaboration.

Messaging: “Legacy brands approve of us, they want us around.”

Long before designer dad sneakers infiltrated fashion hot spots across the globe, the New Balance 574 set the gold standard for what a well-designed, chunky, retro runner should be. It looked great when it launched in 1988, and in 2018 it manages to look stylish on just about anyone who wears it—actual dads included. Over the years, the 574 has become the go-to New Balance model when it comes to collaborations, too, so it’s seen a fair number of upgrades and interactions. But the latest collab—with the high-tech clothing label Ministry of Supply—brings the 574 into the ultra-performance future. – Tyler Watamanuk, GQ

Messaging: “The finest legacy brands trust our platform.”

This month, Mr. Porter launched a tongue-in-cheek collaboration with Prada. As luxury continues to grow online, Mr. Porter is pushing to become the destination for such wares. This type of heritage nod goes a long way with consumers.

Since the 1990s, the brand has maintained an enviable position firmly at the forefront of fashion, to the extent that it has become a household name, a byword for sleek elegance, forward-looking design and, yes, a lot of fun print shirts. So great is the admiration for the brand’s wares in the MR PORTER office that there was something of a festival atmosphere when, in September 2016, we became the first online store to offer Prada’s much-coveted menswear collection.

Brand: Nike will make small gains against Adidas by copying the German brand’s “creators” playbook (click above) but Adidas will remain the brand for rebels and the message will resonate better in 2018, as consumers shun the status quo.

eCommerce: Podcasts will continue to mature their eCommerce operations. There will be more examples of refined stores and high quality brand plays in merchandise.

Digital Media: Netflix is on to something and may scare the likes of AMC and Cinemark in 2018. Will Smith scored a big win with 11M week-one views. This is out of the 53 million Netflix subscribers. Expect the streaming service to redefine what Netflix means by building on the critical momentum of “Mudbound” and the viewership success of “Bright.”

eCommerce: Amazon will cut its affiliate spending by upwards of 40% in 2018. This will most likely affect independent media groups and some of BuzzFeed’s most recent efforts.

Digital Media: 2018 will be the year that Youtube influencers take ownership over their eCommerce presences and flock to white glove services that are fully vertical.

DNVB: Walmart will buy 1-2 more digitally vertical native brands in 2018. They will also test a smaller-box urban storefront, by a different name, for their higher end brands.

eCommerce: Spurred by GGV Capital’s belief in China’s commerce sector, brands will begin spending considerable time working with China’s trove of mobile-first eCommerce platforms to grow through international channels. In 2008, it was SEM. In 2012, it was social. In 2016, it was the Soho pop-up. In 2018, it will be American exports in China.

eCommerce: Shopify will develop a ‘featured’ marketplace for its top Shopify and Shopify Plus performers and it will compete against the likes of Wish and others. Expect this to be launched in the form of a mobile app with one-click purchasing. Tobi, Harley, and crew will also launch their first of many private label brands to appear on this marketplace app.

Digital Media: 🗣2PML will become a leading commerce podcast in 2018. It will become the go-to 20 minute pod for polymaths with little time for market research, continued education, and Porter’s Five Forces analysis.

A last word: when will you see your favorite brands in Chinese marketplaces?

Detroit, Michigan — One of the more impressive brand statements I’ve seen was held for 3,000 participants at Detroit’s COBO. From vendors to Alibaba employees to credentialed media, I was impressed by what I observed.

Walk around and you’ll see examples of retailers like Stadium Goods, who are strong advocates for Alibaba’s marketplace model. Then there were (very) small business owners who were less sophisticated than what you’d imagine, selling trinkets and cookies and their own version of coffee. This was all meant to represent Jack Ma’s commitment to the little guy.

There were well-designed booths dedicated to discussing government policy and informational breakouts. There were even three dimensional data-visualizations peppered throughout the conference room floor, on display to help you understand a bit of what’s at stake here. Alibaba, a company whose entire mission is to make it easy to do business anywhere struck me as a contrast to Amazon’s reputation for being hard on brands with seasonal product lines.

When you hear about Amazon, “customer” is the Amazon Prime member who receives the package. For Alibaba, consumers are clearly important but the “customer” in Ma’s eyes is the small business owner.

There will come a time when brands must invest in a quickly approaching economy. Unfortunately for many of us, the eCommerce economy often devalues brand equity while holding ease of discovery and < 72 hour fulfillment as the new benchmark for brands – big and small. By 2020, the easier your brand is to find across digital channels, the more likely the business is to thrive.

I’m convinced that the majority of savvy brands will pursue a diversity of channels, with Alibaba and Amazon at the core of their seven point strategies. This may mean reallocating inventory from brick and mortar retailer distribution for some teams and it may also means hiring eCommerce executives that will be prepared to operate with platform flexibility while maintaining brand standards.

I left Detroit convinced that American retailers will be of Jack Ma’s finest customers and that there will be a lot of brand overlap between the two platforms. As Facebook and Google’s product search economy is cannibalized (stateside) by Amazon’s fast-growing search product, delaying an Amazon and Alibaba strategy may be akin to grasping to the nostalgia of your Blu-ray DVD collection.